Chevron's Dissident Shareholders Unmoved by Its Big Win in N.Y.

Chevron's federal court victory and campaign against its critics has not stifled dissent from the New York State comptroller and other shareholders over its potential liabilities in Ecuador, new meeting records show.

For several years, Chevron's dissident shareholders have warned of the billions in liabilities that the company faces if forced to pay an environmental judgment for its predecessor Texaco's operations in the Amazon.

Comptroller Thomas DiNapoli, in particular, wrote an editorial for a Huffington Post, condemning what he called Texaco's "indiscriminate" disposal of "nearly 16 billion gallons of hazardous waste." He urged Chevron to settle its longstanding lawsuit in shareholder letters dated November 2008, May 2011 and May 2012.

Chevron has long decried as fraudulent a verdict handed down three years ago from an Ecuadorean court that would have it pay $9.5 billion. The company said its opponents bribed judges, cooked scientific studies and ghostwrote the final ruling, which they allegedly hoped to collect through an international pressure campaign to settle the case.

Back in New York, U.S. District Judge Lewis Kaplan credited most of the company's allegations in a nearly 500-page decision that found the judgment had been "procured by corrupt means."

Still denying Chevron's allegation, and promising to ignore it in continued collections actions in Canada, Brazil and Argentina, the Ecuadoreans are appealing to the 2nd Circuit.

Kaplan's decision also seemed to have little effect for the band of dissident shareholders at Chevron's annual meeting on Wednesday.

As in previous years, DiNapoli moved to appoint a director to act as an independent environmental expert. His proposal received an identical 22 percent of the vote before and after the New York verdict, according to Chevron press releases.

The proposal states: "In November, 2013, Ecuador's highest court, upholding a 2011 judgment, found Chevron liable for $9.5 billion in damages arising from widespread contamination of Amazonian land and water resources by Texaco between 1964 and 1992."

The Ecuadorean Supreme Court's affirmation occurred at the time as Chevron's New York trial, which the proposal does not mention.

When asked about the comptroller's current stance on the Ecuador dispute, a DiNapoli spokesman said: "We will continue to monitor and assess the ongoing litigation and to hope for a prompt resolution in the best interest of the company."

DiNapoli's continued introduction of the proposal is remarkable considering that Chevron accused him of "misconduct" in November 2012. Its ethics complaint blasted the comptroller for receiving a $60,000 donation from New York-based attorney Steven Donziger, who represented the Ecuadoreans.

At the time, DeNapoli replied: "This is a baseless attempt by big oil to intimidate me and it won't work."

Chevron's reputation as one of Washington's biggest corporate contributors also drew charges of hypocrisy from lawyers for the Ecuadoreans. Last year, the watchdogs at Public Citizen teamed up with environmentalists for a complaint to the Federal Election Commission about Chevron's alleged $2.5 million campaign super PAC contribution to the Congressional Leadership Fund.

Simon Billenness, another dissident shareholder, recounted in a phone interview how Chevron hit him and his former employer, Trillium Asset Management, with subpoenas.

When reached for comment, Billenness had been eating barbecue with fellow activist shareholders at Midland, Texas, where Chevron held its meeting this year. The oil giant reportedly chose the remote location to announce that it would invest in fracking of the nearby Permian shale.

"I've gotten a lot of support from a lot of shareholders, particularly because they are so disgusted with how Chevron has treated us, treated Trillium, and treated the New York state comptroller as well," he said.

Billenness said that his pro bono attorneys at the environmental nonprofit EarthRights International have been able to fend off Chevron's discovery requests.

"To date, I have not had to hand over a single email, or a single document," he said.

This year, Billenness introduced resolutions to separate the positions of Chevron CEO and board chair, titles now held by John Watson. That resolution received 19 percent of the vote, a significant drop from what the same measure received in 2012. It never came to a vote last year.

The results remained at a constant 35 percent meanwhile for the other measure Billenness proposed: creating a lower threshold for calling special shareholder meetings.

Chevron's press releases tout a perfect record in getting directors to vote for the board's recommendation.

Spokesman Morgan Crinklaw emphasized how DiNapoli and Billenness "continue to cite the Ecuador litigation despite it having been found to be a fraud," but that Chevron "shareholders continue to overwhelmingly reject their proposals."

"Our stockholders strongly support defending the company against the lawsuit in Ecuador and our efforts to uncover the extensive fraud and misconduct perpetrated by Steven Donziger and his associates," Crinklaw added in an email. "This support is reflected in the fact that the proposals referencing the litigation are regularly rejected by an overwhelming majority of stockholders."

Chevron dedicated a page of its 2014 Proxy Statement of the shareholder meeting to heralding the ruling and updating directors about the far-flung international litigation.

Billenness' speech at this year's conference indicates that the management's line won't quell the minority's dissent.

"The recent ruling in New York by Judge Kaplan - that management has touted - is not binding on any court outside the United States," he told directors, according to copy of his speech. "Moreover, it is under appeal and could be overturned. Its protection of Chevron's assets outside the United States is therefore very limited."